Ranking the Top 100 Global Brands - Who’s most engaged?

Historically, economic hardship motivates companies to take a good, hard look at their marketing budgets and try to compute each investment’s financial value. This recession is no different, with one exception: social media has become perceived as an indispensible marketing tool — one getting increased investment — despite a historical inability to quantify its worth.

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The world’s most valuable brands.

Who’s most engaged?Prepared by:ENGAGEMENTdbRanking the Top 100 Global Brandswww.ENGAGEMENTdb.comJuly 2009make high res21TABLE OF CONTENTSIntroduction.........................................................................................1Key Findings.........................................................................................2Depth of engagement can be measured..............................................2Brands fall into one of four engagement proﬁles..................................5Financial performance correlates with engagement.............................6Best practices........................................................................................8Starbucks............................................................................................8Toyota...............................................................................................12SAP....................................................................................................14Dell....................................................................................................16Key Takeaways..................................................................................18Methodology.....................................................................................20AppendicesAppendix A: Engagement Scores for the Top 100 Global Brands.........23Appendix B: Engagement Scores by Industry......................................26Appendix C: Engagement Proﬁles.......................................................31Endnotes.............................................................................................32INTRODUCTIONHistorically, economic hardship motivates companies to take a good, hard look at their marketingbudgets and try to compute each investment’s ﬁnancial value. This recession is no different, withone exception: social media has become perceived as an indispensible marketing tool — one gettingincreased investment — despite a historical inability to quantify its worth.There is little left to debate about whether or not one should participate in social media — virtually allcompanies, big and small, have acknowledged social media’s presence, and ﬁrms who do not have ablog, Facebook page, or Twitter account now ﬁnd themselves in the scarce minority. Many, however,appear to be blindly hopping on the bandwagon — people are creating company proﬁle pages andsending updates without knowing how much they should invest in these distribution channels or whatsuccess even looks like. This brings us back to Economics 101: how can a company effectively allocatelimited marketing resources if they cannot deﬁne the investment’s value?For the ﬁrst time ever, Wetpaint/Altimeter Group have gone beyond surface case studies to measurethe true ﬁnancial value of social media. We conducted our research not just on a small scale, but basedon the world’s 100 most valuable brands – these are brands that are widely acknowledged for settingthe standards in marketing as measured by BusinessWeek / Interbrand “Best Global Brands 2008”rankings. And now, we evaluate how well they are engaging their consumers using social media and,even more importantly, how that engagement correlates with their most important ﬁnancial metrics:revenue and proﬁt.A surprising conclusion: While much has been written questioning the value of social media, thislandmark study has found that the most valuable brands in the world are experiencing a directcorrelation between top ﬁnancial performance and deep social media engagement. The relationship isapparent and signiﬁcant: socially engaged companies are in fact more ﬁnancially successful.So now we know it pays to be social, but it is important to note that by “social,” we’re talking aboutdeep engagement, not merely having a presence. And what exactly do we mean by deep socialengagement? Resembling any in-person exchange, socializing requires more than just being there— you have to interact with others, instigate discussions, and respond during conversations. Ourstudy implies value in social engagement on top of social presence — it pays to actively and continuallyparticipate and invest in your networks.This report also contains case studies highlighting our interviews with four unique companies– Starbucks, Toyota, SAP, and Dell – all of which scored top quartile engagement rankings. By goingbeyond just the statistics, we introduce a playbook for how the best are succeeding in social media sothat you, too, can engage and succeed.Our hope is that the data and best practices in the ENGAGEMENTdb Report provide a new way to thinkabout how to use these powerful tools and how companies should invest their marketing resources.The right level of social media engagement could be the key to propelling you into tomorrow’s rankingof the top 100 global brands.Ben Elowitz Charlene Li

CEO, Wetpaint Partner, Altimeter Group23There exist thousands of social media channels, each with a slightlydifferent value proposition. It is therefore a daunting task to ﬁgurehow to objectively evaluate various marketing efforts across all socialmediums. The Wetpaint/Altimeter Group ENGAGEMENTdb Reportintroduces a single criterion: engagement.KEY FINDINGSThe goals of the study were to measurehow deeply engaged the top 100global brands are in a variety of socialmedia channels and, more importantly,understand if higher engagement iscorrelated with ﬁnancial performance.We found that not only could wequantiﬁably measure engagement,we could also understand how moreengaged companies tap an engagementmindset to perform better. Below aresome of our key ﬁndings.Depth of engagement can bemeasured.We evaluated and scored each brand’sengagement in various channelsusing criteria customized for thatparticular type of social media. We alsoexamined how deeply involved differentdepartments and executives were inthese channels. Thus, we looked at notonly at the breadth, but also the depthof engagement.Adding all channel sub-scores togethergives the brand’s overall engagementscore. Understandably, the morechannels a brand leverages, the higherits overall engagement score will be.All of the engagement scores for thebrands are listed in Appendix A. The topengagement score of 127 was earnedby Starbucks, which has presence in 11channels.Charting the companies’ engagementscores against the number of channelsthey are in yields another insight — theaverage depth of engagement asrepresented by two regression lines (seeFigure 1).Figure 1: Engagement Scores of Top 100 Global BrandsFigure 1: all 100 brands80100120140High Engagement0204060800 1 2 3 4 5 6 7 8 9 10 11 12Many ChannelsOne ChannelLow Engagement123286516142345Two regression lines are used — one forbrands engaged in six or fewer channelsand one for brands engaged in sevenor more channels.1Brands that appearabove the line are more engaged onaverage than other brands engagedin the same number of channels, andthose appearing below the lines are onaverage less engaged across all of theirchannels. We also found that:• As the number of channels increase,overall engagement increases at afaster rate.There’s a reason why wedecided to use two regression lines toshow the trend — brands that werein seven or more channels engageddeeply acrossallchannels where theywere present, as compared to brandsthat were present in fewer channels.There is an exponential growth in thedepth of engagement as the brandextends itself into more and morechannels. Sometimes this is due tobrands learning from their experiencesin other channels, making it easier toengage deeply in new channels likeTwitter. This effect is also a reﬂ ectionof the brands’ commitment to socialmedia — once they are invested inmultiple channels, they are more likelyto engage deeply in each of them.• Engagement differs by industry.

It’s no surprise that engagementtends to differ by industry (see Figure2). Not only are some industries onaverage present in more channels, theyalso engage with them more deeply.For example, media and technologycompanies tend to be in more channelsand engage deeply within them. Incontrast, apparel, consumer products,food & beverage, and ﬁ nancial brandsin general don’t engage as much— which is to be expected given thatcompanies in these industries are justbeginning to experiment with socialmedia.But even within industries, there isa wide spectrum of engagement.In the auto sector, some brands likeToyota are highly engaged in manychannels, especially around the Prius.In contrast, luxury brands Mercedes-Benz and Porsche are in just twochannels each. In other words, distincttarget audiences can inﬂ uence theappropriate level of social mediaengagement even within speciﬁ edindustries. Appendix B providesadditional details on select industries.Brands fall into one of fourengagement proﬁ les.Depending on the number of channelsand how deeply they are engagedin them, brands took on one of fourspeciﬁ c proﬁ les (see Figure 3):•

Mavens.These brands are engagedin seven or more channels and havean above-average engagement score.Brands like Starbucks and Dell are ableto sustain a high level of engagementacross multiple social media channels.Mavens not only have a robust strategyand dedicated teams focused on socialmedia, but also make it a core part oftheir go-to-market strategy. Companieslike these could not imagine operatingwithout a strong presence in socialmedia.• Butterﬂ ies.These brands are engagedin seven or more channels but havelower than average engagementscores. Butterﬂ ies like AmericanExpress and Hyundai have initiatives inmany different channels, but tend tospread themselves too thin, investingin a few channels while letting otherslanguish. Their ambition is to be aMaven and they may get there — butthey still struggle with getting thefull buy-in from their organizationsto embrace the full multi-wayconversation that deep engagemententails.• Selectives.These brands are engagedin six or fewer channels and havehigher than average engagementscores. Selectives like H&M and Philipshave a very strong presence in justa few channels where they focus onengaging customers deeply whenand where it matters most. The socialmedia initiatives at these brands tendto be lightly staffed — if they are atall, meaning that by default, theyhave to focus their efforts. These arebeachheads, started by an impassionedevangelist with a shoestring budget.• Wallﬂ owers.These brands areengaged in six or fewer channels andhave below-average engagementscores. Wallﬂ owers like McDonaldsFigure 2: Engagement Varies by IndustryFigure 2: engagement by industry (with labels)Media (6)Technology (12)5060708090High EngagementApparel (7)Auto (12)Bus Services (3)ConsumerElectronics (7)ConsumerProducts (12)Financial (13)Food & Bev (11)Leisure (5)Manufacturing (4)Retail (8)010203040500 1 2 3 4 5 6 7 8 9 10 11 12Many ChannelsOne ChannelLow EngagementKEY FINDINGSKEY FINDINGSKEY FINDINGS214367and BP are slow to or are just gettingstarted, dipping their toes into socialmedia waters. They are still trying toﬁ gure out social media by testing just aFigure 4: Engagement Correlates to Financial PerformanceWe also found that social media reachalone may have a positive impact:Butterﬂ ies enjoyed signiﬁ cantly strongerrevenue returns than Selectives orWallﬂ owers. Why is this so? Ourhypothesis centers around touchpoints: More touch points can presenta ripple effect, inducing viral marketing,boosting brand recognition and drivingsales volume.On the other hand, it is interestingto note that compared to Butterﬂ ies,Selectives delivered higher gross andnet margins, suggesting that deepengagement in a few channels can bea rewarding and effective social mediastrategy. Focusing on depth overbreadth present an opportunity to betterunderstand the customer, react quicklyto customer demand, and improvesatisfaction – which in turn generatespricing power and drives businesssuccess. This insight relates back to ourindustry-speciﬁ c ﬁ ndings: the optimallevel of presence and engagementdepends on a variety of factors. It’s notabout doing it all, but doing it right.While these ﬁ ndings do not necessarilyimply a causal relationship, they stillhold powerful implications. Socialmedia engagement and ﬁ nancialsuccess work together to perpetuatea healthy business cycle: a customer-oriented mindset stemming from deepsocial interaction allows a company toidentify and meet customer needs inthe marketplace, generating superiorproﬁ ts. The ﬁ nancial success of thecompany, in turn, allows furtherinvestment in engagement to build evenbetter customer knowledge, therebycreating even more proﬁ ts — and thecycle continues.KEY FINDINGSKEY FINDINGSKEY FINDINGSfew channels. They are also cautious aboutthe risks, uncertain about the beneﬁ ts,and therefore engage only lightly in thechannels where they are present.Figure 3: Brands Fall Into One of Four Engagement Proﬁ les����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������Financial performancecorrelates with engagement.Back to the million-dollar question: Whydo social media? We ﬁ nally have a goodanswer: Because it pays off. While noone yet has the data to determine directcause and effect, what we do ﬁ nd isa ﬁ nancial correlation between thosewho are deeply engaged and those whooutperform their peers (see Figure 4).Moreover, this correlation reﬂ ects morethan just the state of various industriesgiven the current economic conditions– industries are well represented acrossthe spectrum of engagement proﬁ les(see Appendix C).To be speciﬁ c, companies that are bothdeeply and widely engaged in socialmedia surpass their peers in terms ofboth revenue and proﬁ t performanceby a signiﬁ cant difference. In fact,these Mavens have sustained strongrevenue and margin growth in spite ofthe current economy. Coincidence?Perhaps, but we’re looking at statisticalsigniﬁ cance among the world’s mostvaluable brands.89In addition to the statistical data, we also qualitatively examined howfour brands manage to engage broadly and deeply — in some cases,with very limited dedicated staff. One recurring theme throughout thesecase studies is that engagement cannot remain the sole province of afew social media experts, but instead must be embraced by the entireorganization. We now take a deeper look at the strategies, processes,and technologies that allow Starbucks, Toyota, SAP, and Dell to engageboth broadly and deeply, with the goal of illuminating what has fueledtheir success and to provide insights and best practices to help anybusiness move towards deep engagement.BEST PRACTICESStarbucksStarbucks has a small social media team with only six people, and yetStarbucks obtained the highest engagement score – 127 in 11 channels– among the top 100 brands. This is all the more impressive because asa bricks-and-mortar store with thousands of physical outlets, Starbucksbeat out advanced media and technology brands. We spoke with ChrisBruzzo, VP of Brand, Content and Online, and Alexandra Wheeler, Directorof Digital Strategy, at Starbucks to understand how Starbucks engagesso successfully. Wheeler explained, “We live in the physical world withthousands of natural touch points, so when we laid out the vision for oursocial strategy, it felt like home for the brand. It’s about the relationships weform with our customers, not marketing.”Industry Top 100 Rank Score Channels Social Media TeamLeisure 1 127 11 6 peopleWheeler acknowledges that the physical, distributed nature of Starbucks is alsotheir biggest challenge, with people changing all the time while others are eager toengage directly through channels like Twitter. “We need to be marching throughthis in the right way,” stated Wheeler. “We need to build our social strategy up withintegrity so that we are not compromising the relationships with customers.” Hereare some of the ways they balance distribution and centralized control:Deputize people throughout the organization.The ﬁ rst channel Starbucks launched wasMyStarbucksIdea.com, where peoplesubmit , comment on, and vote for theirfavorite ideas. But rather than just putup the technology, Starbucks set out toensure the departments impacted bythe site (which includes practicallyeverydepartment) had a representative whowas responsible for being the liaison.For example, Chuck Davidson on theStarbucks Card team championed theidea of offering a mini-Starbucks cardthat was suggested by a customer inAugust 2008. As the person in charge ofinnovation in that department, Davidsontracked the comments, developed theproduct, and launched it with a blogpost on the site.2It may appear easy and obvious now,but Wheeler said that the days priorto the launch ofMyStarbucksIdea.comwere the hardest. “Getting theoperational readiness in place, getting1011BEST PRACTICESpeople onboard was tough. We hadto take a leap of faith together.”The key was making the case to the50 representatives from all aroundStarbucks that engaging with peopleon the new site would eventually comenaturally, because they would beoperating in areas where they alreadyhad responsibility and knowledge.Understand how each channel provides a different dimensionof engagement.As Starbucks became more comfortablewith social technologies, they realizedthat each channel is different andrequired developing different facets ofthe relationship with their audience.For example, when Starbucks startedengaging on Facebook in October2008 atFacebook.com/starbucks,they approached and took over theownership of user-created communities(with the blessing of the original pageadministrators). At that time, thepage had about 200,000 fans, but acombination of Starbucks generatingcontent and customers sharing theirenthusiasm for the brand has built thatfan base to nearly 3.5 million members— representing one of the largest groupson Facebook.Bruzzo explained the source of thegrowth: “Recently, we found that forevery four people that interacted witha particular news item, another threepeople are added virally as friendsof those people.” Just to put it inperspective, the announcement of themini-Starbucks card on Facebook drew1,406 comments and 12,382 people“liking” the post so that it showed upin their news feed. Facebook is not onlyabout messaging to the 3.5 millionfans, but also allowing the fans to talkwith each other about their love for theproduct and experience.Contrast that toTwitter.com/starbucks

where one person responds to inquiries,such as replacement blades for coffeegrinders, or even questions from baristasabout changes in the menu. With250,000+ followers, Starbucks usesTwitter as an “in the moment” channelto deliver timely customer support andspread word about the latest breakingnews and contests.BEST PRACTICESCentralize coordination.While Starbucks encourages designatedemployees to have a sense of ownershipin customer engagement as experts onspeciﬁc topics, the company is not yetendorsing a widespread engagementin social channels. This can sometimesbe difﬁcult as many of the employees —especially those who work in stores andare avid users of social media channelslike Facebook and Twitter — chomp atthe bit to engage. Wheeler admitted,“For every single piece of content thatwe put online and do right, we also doa lot of shutting down.” The reason:Starbucks wants to make sure that thereis consistency in the approach and inthe experience for customers. “We areprotective of these channels and wantto make sure that we are using themin the right way,” explained Wheeler.There are plans to engage more broadly,but again, coordination will be centrallymanaged.Moreover, the interactive team isfully integrated into overall marketingunder the Bruzzo’s oversight so thatall traditional forms of marketing areintegrated with email, paid search, andsocial channels to maximize impact,rendering centralized consistency andcoordination all the more important.Find champions who can explain and mitigate risk.Starbucks had one major advantage inits entry into social media — CEO HowardSchultz personally introduced andchampionedMyStarbucksIdea.comfromthe start. A core belief in the importanceof customer engagement allowed thecompany to take risks and try new thingsas a matter of faith. Bruzzo emphasized,“We had to accept that there weresome unknowns. If you try to mitigateevery piece of risk, you will be eitherinauthentic or fail.”In addition to CEO Schultz, there wasalso an “everyday” champion. Bruzzoadded, “There needs to be someonewho not only gets social media but canalso translate it for the organization.Alex (Wheeler) is a key part of that.”Having Wheeler was essential, as shewas the person who cajoled, prodded,and convinced everyone to take that ﬁrststep into social media.1213Industry Top 100 Rank Score Channels Social Media TeamAuto 21 54 7 3 peopleBEST PRACTICESToyotaToyota is relatively new to the social media arena, having started in earnestjust two years ago — Toyota launched its YouTube channel in March 2008and established a Twitter proﬁ le in April 2008. Yet with a team of just threepeople, Toyota was able to achieve an engagement score of 54 across7 channels. We spoke with Scott DeYager, Social Media Supervisor, andDenise Morrissey, Online Community Manager, about how they engagewith Toyota customers.Be in it for the long haul.Morrissey stressed that a key tosuccessful engagement is to commit toa relationship with customers in newchannels and convince your customersthat you will be there for them. “If youare going to engage, you have to havea plan and make sure that resources areavailable. Because you can’t gracefullyexit — once you’re in, you’re in. The daysof walking away from a campaign areover — once we engage, we have tocommit to it.”Pick channels carefully.From the start, the social mediateam realized that there would be alot of resistance to having a Toyotablog. “We had to choose the path ofleast resistance,” shared DeYager.So they started with a YouTubechannel (YouTube.com/toyotausa)that showcased video content thatToyota already had handy — it wassimply a matter of uploading thecontent to YouTube. Twitter camenext (Twitter.com/Toyota), primarilybecause it leveraged the corporatecommunications work that DeYager’steam was already doing. They reasonedthat it would be hard to get in troublewith 140-character postings and keystakeholders viewed channels likeTwitter and YouTube as less threatening.The team works closely with outsideblogs likePriuschat.com— which is notafﬁ liated with Toyota — by providingaccess, information, and support. Butthey have no plans in the near term tolaunch a blog — their limited resourcesand organization barriers make bloggingdifﬁ cult. To extend their reach further,they recently launched Facebook pagesfor the Prius (Facebook.com/prius)and Lexus (Facebook.com/lexus) inconjunction with their outside agency.3Spread engagement to employees beyond the social media team.As they were only three people, DeYagerand his team from the start reachedout to people around the company toprovide the content to ﬁ ll the channelswhere they engage with customers.Take a look at the Twitter account andyou’ll see that in addition to DeYager,three public relations specialists fromsales, environment/safety, and publicaffairs/community outreach contributeposts. The Toyota Twitter team usesmonitoring software to identify tweetsmentioning Toyota, then responds froma respective area of expertise usingtechnology from CoTweet to managemultiple authors on the single Twitteraccount.4This same mode is utilized onToyota’s Facebook pages — responserequests are sent out and come backfrom around the company, dependingon the topic.Not only does this put the real expertsfront and center, but the social mediateam couldn’t manage the effortsany other way. “There aren’t enoughbodies here to engage 24/7,” explainedMorrissey. “Together with our agency,we put together guidelines and bestpractices on customer engagement,then communicated and shared theresponsibilities with the functionalgroups who could respond to, forexample, environmental news.”The team also pulls content such asvideo from around the organization.Morrissey commented, “It was never anargument inside the organization to getcontent — people are excited to give uscontent, such as dealer training videos,because it serves the public as well. Alot of the departments are coming to uswith content.” DeYager’s team createda social media governance board todevelop loose guidelines on how contentwould be shared between the Toyota,Lexus, and Scion divisions, making itmuch easier for the social media team togo freely around the organization andrequest content.BEST PRACTICES1415Industry Top 100 Rank Score Channels Social Media TeamTechnology 9 86 10 35 peopleBEST PRACTICESSAPAs one of the largest technology companies in the world, SAP has thedaunting challenge of engaging its extended developer community. TheSAP Community Network (SCN) is now six years old, 1.7millionusers strong,and run by 35 people. The social media team manages the web site as wellas multiple in-person events around the world, each with attendance wellinto the thousands.5Mark Yolton, Senior VP of SCN, remarked that whileSCN has a relatively large team compared to other companies, “There’sno way that I and my team of 35 people could ‘manage’ the 1.7 millionmembers of the community.” But engage they do, with an engagementscore of 86 across 10 channels (ranked 9th out of the top 100 brands). Hereare some of their best practices.Open the platform to anyone and everyone.Anyone can contribute to the blogs,discussion forums, and wikis on the SCNsite — and 5,000 bloggers do. Two-thirdsof contributors represent customers,thought leaders, analysts, and partnersfrom the broader SAP ecosystem. Yoltonexplained, “Five thousand people havethe keys to the blogging system on SCN.That’s one way to scale — by involvingthe community very actively.”To encourage activity and engagement,SAP has a reward point ContributorRecognition Program that awards pointsfor speciﬁ c activities, such as maintaininga blog, responding to forum questions,or adding to a wiki page.6Why wouldanyone care about the points? Becauseto the system communicates thereputation of each developer, vendor,partner, or thought leader as an expert— and can help secure a job, contract,and sale.Encourage employees to tap into social media to get work done.With 1500 employee bloggers and 400employees actively publishing content inother forms, SAP clearly has few controlissues about allowing employees toengage. That’s because the companyrealizes that real work gets done in thesesocial channels. It goes all the way to thetop — CTO Vishal Sikka recently bloggedabout concepts like “open cloudcomputing” and “timeless software”in order to ﬂ oat the idea and getfeedback. Yolton explained, “Productmanagers are using the social tools tocommunicate information about theirnew products and to get feedback —even down to product documentation.”BEST PRACTICESEngage in new channels where people already are.SCN started with blogs, wikis, anddiscussion forums, but recently branchedout to new channels like Twitter as well.“We think about the ecosystem morebroadly than just customer management— it’s a symbiotic relationshipbetween the members of our broaderecosystem.” So while there are roughlyeight “ofﬁ cial” Twitter accounts, thereare many more “personal” accountsmanaged by SAP employees, relatedpartners like mentors, and analysts/bloggers.7Yolton supported the roleof individuals on Twitter, saying, “Acorporate presence doesn’t speak wellin Twitter. It’s better to have individualvoices in Twitter where they can engageas people.” So while there is at best alight tie between the SCN site activitiesand Twitter, the philosophy of deep andwide engagement carries through evenon non-SAP SCN sites.Support engagement as an extension of the company culture.One of the newest channels SAP isusing isTwitter.com/saplistens, achannel where SAP invites consumersto “Talk with us. We want to learn.”Yolton emphasized that this reﬂ ects theoverall culture of the company, one thatvalues the ability to listen well. WhileYolton can’t yet prove a measurablecausal relationship between customerengagement and the company’sﬁ nancial performance, he believes thereis a correlation. “It’s more like branding— our activities reﬂ ect an attitude ofthe company that is more engaged, acompany that values the opinions andviewpoints of the many different voicesof customers and suppliers. If we canmake our customers more successful,then they will buy more products andservices.”1617Industry Top 100 Rank Score Channels Social Media TeamTechnology 2 123 11 n/aBEST PRACTICESDellDell’s social media engagement was initially forged by crisis — from the “DellHell” summer of 2005 to the ﬂ aming laptops in 2006. But from these trials,Dell emerged as one of the most engaged and active companies in socialmedia, with an engagement score of 123 in 11 channels. Their best practicespertain primarily to how to extend and sustain engagement across theorganization.Be conversational from the start.When Dell started engaging in socialmedia, they started small with a bloggerrelations program designed to reachout to bloggers writing about Dell. Thissimple start — focused on a dialoguewith bloggers — set the tone for allfuture engagement, now ranging froma blog (IdeaStorm, an idea generationhub that was the inspiration forMyStarbucksIdea.com), to multipleTwitter accounts. Richard Binhammer,a senior manager in corporate affairs atDell, observed, “When we moved intoother channels, we learned our lessonand adopted a conversational approachculturally.”BEST PRACTICESMake social media part of the job, just like email.There are several examples of how Dellemployees are leveraging social media toget their jobs done, engaging for 15-20minutes a day as part of their routine.For example, Max Weston, an educationstrategist at Dell, tweets regularly,sharing his thoughts on education andtechnology with 3,000+ followers.8

Matt Domsch, a technology strategist inthe ofﬁ ce of the CTO, is a Linux expertwho pops in and out of Twitter severaltimes a week and also has a personalblog on which he engages fellow Linuxenthusiasts.9Binhammer explains, “Maxdoesn’t have to get on a plane and go toa Linux conference to bring that outsideperspective into his job every day. Forpeople like Max, this is just anotherchannel for communicating. It’s an add-on, not a replacement, and is like usingyour phone or email.”Modularize and synchronize content across channelsWhile Dell recognizes that each channelis unique, it also understands thatengagement frequently jumps betweenchannels. Dell recently facilitated cross-channel engagement with a post on theDirect2Dell blog asking for feedback onthe future of Dell Mini Netbooks whiledirecting people to share their thoughtson IdeaStorm as well.10Dell also usedthe opportunity to launch a Twitteraccount atTwitter.com/dell_mini. Theengagement across all of these channelsis being driven by three members ofthe Dell Mini development team whorespond to the Netbook idea threadsdirectly.In the future, Dell could create whatLionel Menchaca, Chief Blogger at Dell,calls “activity streams” to incorporatenot only Dell-generated content, butalso Dell community and industry newsaround Netbooks for Mini owners.11Thatinformation could be pushed into blogs,tweets, video, photos, etc. so that Miniowners can consume content in thechannel of their choice.KEY TAKEAWAYS1819Engagement via social media IS important — and we CAN

quantify it.Many different social media channels exist, each with a slightlydifferent value proposition. Rather than try to understand just theindividual value of each channel, the ENGAGEMENTdb looks acrossmain channels and categorizes not only breadth but also depth ofbrand engagement in social media.What’s in it for me?The ENGAGEMENTdb quantitatively demonstrates a statisticallysigniﬁcant correlation between social media engagement and the twomost meaningful ﬁnancial performance metrics – revenue and proﬁt.Money talks, and it’s declaring that it pays to engage meaningfully insocial media.Emphasize quality, not just quantity.The ENGAGEMENTdb Report shows that engagement is more than justsetting up a blog and letting viewers post comments; it’s more thanjust having a Facebook proﬁle and having others write on your wall.Rather, it’s keeping your blog content fresh and replying to comments;it’s building your friends network and updating your proﬁle status.Don’t just check the box; engage with your customer audience.To scale engagement, make social media part of everyone’s job.The best practice interviews have a common theme — social media is nolonger the responsibility of a few people in the organization. Instead,it’s important for everyone across the organization to engage withcustomers in the channels that make sense — a few minutes each dayspent by every employee adds up to a wealth of customer touch points.Doing it all may not be for you — but you must dosomething.The optimal social media marketing strategy will depend on a varietyof factors, including your industry. If your most valuable customers donot depend on or trust social media as a communication medium, orif your organization is resistant to engagement in some channels, youwill have to start smaller and slower. But start you must, or risk fallingfar behind other brands, not only in your industry, but across yourcustomers’ general online experience.Find your sweet spot.Engagement can’t be skin-deep, nor is it a campaign that can be turnedon and off. True engagement means ful engagement in the channelswhere you choose to invest. Thus, choose carefully and advocatestrongly to acquire the resources and support you will need to succeed.If you are resource-constrained, it is better to be consistent andparticipate in fewer channels than to spread yourself too thin.2021Have a plan of how you will ramp engagement. Took a look at how somecompanies are managing to engage deeply – the strategies, processes,and technologies they use to engage both deeply and widely.METHODOLOGYAll data is based on availability during the time that this study wasconducted (March – May, 2009).What we looked atThe Top 100 brands based onBusinessWeek / Interbrand “Best GlobalBrands 2008” publication.What social media channels

did we examine?We recognize that each social mediatool is unique and functions differentlyto deepen the consumer relationship.Applying our industry expertise in themost prevalent social media networks,we narrowed the scope of our study tothe following social media channels:• Blogs• Branded social network/community• Content distribution to other sites (e.g.Facebook Connect, ShareThis, etc)• Discussion forums• External social network presence

(e.g. Facebook, MySpace)• Flickr / Photobucket• Innovation hubs (e.g. centralizedcustomer community to createinnovation)• Wikis• Ratings and reviews• Twitter• YouTubeNote: Corporate/Executive involvementwas also weighted on par with otherchannels rather than as an engagementsub-score within each channel. Why?A company that makes social mediatools such a priority that the executiveleadership team regularly participatesrepresents a meaningful, on-goinginvestment that merits credit beyonda “bonus point” within speciﬁc toolbuckets. Treating organizationalparticipation in this manner furthersour goal of rewarding companies thatmake material investments in socialengagement.How we scored engagementOver 40 attributes for each of the 100companies were evaluated – in general,the number of channels in which acompany participates was evaluated inconjunction with its respective level ofengagement in each channel.For most evaluation metrics, companiesreceived credit for channels orengagement only if it was evident thatcorporate sponsored/encouragedresources were responsible for creatingthe presence and/or responsible forconsistent participation within thechannel. Companies received partialcredit in cases where strong corporatepresence in channels created by externalparties (e.g. consumers, third partyafﬁliates) was clear and discernible.How we incorporated ﬁnancialperformanceAfter scoring each company’s socialmedia engagement, we reviewed theirlatest business results and tested ourhypothesis that engagement goes handin hand with ﬁnancial success. First, wecollected publically available ﬁnancialperformance metrics for companiestraded in US markets. In order tomaintain data consistency as a basisfor fair comparison, private companiesand/or companies that are only traded inforeign markets were not included in ouranalysis. Revenue, gross margin, andnet margin performance was evaluatedon a “last twelve months” basis (LTM).In other words, the most recent publiclyavailable quarterly data (Q4 ‘08 orQ1 ‘09 in some cases) was used as astarting point. The three immediatelypreceding quarters of data (i.e. Q1 ’08 toQ3 ’08 if starting with Q4 ’08) was thenincorporated to comprise the 12 monthperiod for analysis. All data was collectedfrom Marketwatch and/or Yahoo!Finance.Next, we segregated the companiesinto those that scored above and belowtheir peer set’s average, analyzed their2223METHODOLOGYrespective revenues/margins, andcompared the two groups’ aggregateaverages for each ﬁnancial metric. Thecurrent economic conditions ascertainedthe appropriateness of a relativecomparison as opposed to an absolutestandard of a good vs. bad ﬁnancialoutcome.A signiﬁcant and representative sample(66 of the top 100 brands) was used inthe ﬁnancial analysis.How we uncovered bestpracticesWe identiﬁed several brands that areengaging in unique ways and conductedphone interviews to understandhow they crafted their social mediaengagement strategy.APPENDIX A:ENGAGEMENT INDEX SCORES FOR THE